Editor’s Note: The Mortgage Mix is RISMedia’s weekly highlight reel of need-to-know mortgage-industry happenings. Watch for it each Friday.
- Mortgage rates have been mostly increasing in the past weeks and the week of October 16 was no different.
- We reported this week that 30-year fixed mortgage rates now sit at 6.94%. This is a meager increase from the previous week’s rates, 6.92%, but one that brings rates ever closer to 7%. It also marks a 3.76% increase year-over-year.
- The 15-year fixed mortgage rate is now 6.09%, a 3.61% increase year-over-year.
- The 6.94% rate is the highest point for 30-year-fixed mortgage rates in 20 years, per our reporting last week.
- As the National Association of REALTORS®’ Chief Economist Lawrence Yun recently documented, the 30-year fixed mortgage rate has experienced a largely uninterrupted downturn since 1990. The steady increase during 2022 is the sharpest reversal of that downward slope.
- Yun predicts that mortgage rates could reach as high as 8.5%, though he hopes that rates still hover around 7% and that this will become “the new normal.”
- The Mortgage Bankers Association’s Weekly Application Survey, published on October 18, 2022, found that in September 2022, mortgage applications for new home purchases decreased by 13.2% year-over-year, signaling a decrease in housing market demand.
- As George Ratiu—manager of economic research at com®—as reported by RISMedia, said: “A household earning the median annual income of $71,000 and using a 20% down payment could afford a home priced at $448,700 in January 2022 when rates were 3.1%. In contrast, at a 7% mortgage rate, the same household can only buy a $341,700 home.”
- Due to higher fixed mortgage rates, since September 2022, there has been renewed interest in Adjustable Rate Mortgages (ARMs), which currently sit at a lower rate of 5.65%.
- However, ARMs remain a gamble. While less costly in the short term, they can actually cost buyers more in the long term depending on market rate once the initial fixed period of the mortgage ends.
